Scorpio Tankers (Buy, TP: USD71.10) - Robust long-term outlook
Given its rapid reduction in debt, we see ample room for payouts based on Scorpio Tankers’ 2023–2025e earnings yield of 14%. Investors have already received cUSD185m (cUSD3.1/share, c6% direct yield) in buybacks YTD, with another cUSD160m to go from its repurchase programme. We believe the current rate momentum should see the stock attain more favourable pricing than its current c0.9x P/NAV. We reiterate our BUY and have raised our target price to USD71.1 (68.7).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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